Net neutrality? Comcast says that its peering dispute with Level 3 is just …

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Level 3's inflammatory Monday afternoon press release, in which it basically accused Comcast of trying to whack Netflix streaming traffic and flout net neutrality principles, certainly started a fire. Within hours of issuing the press release, the head of the FCC's Wireline Competition Bureau was on the phone with Comcast, giving the company the business end of her Question Stick. What exactly was going on here, she wanted to know.

So Comcast told her, and in a follow-up letter (PDF), made its answers public for the world to read. That's because, in Comcast's view, the entire dispute is “nothing but good old-fashioned commercial peering dispute" and Level 3 is being "entirely disingenuous."

The entire blowup was extraordinary, because Level 3 has been in commercial arrangements with Comcast for years. It apparently decided to risk whatever goodwill it had built up on its attempt to drive a hard bargain that would put Level 3 in a better position than content delivery network competitors like Akamai and Limelight.

A rash bid

Why take the risk? In Comcast's view, Level 3 may be in over its head with its new agreement to deliver all of the Netflix streaming video traffic. The argument is that Level 3 won the Netflix contract away from other CDN providers by providing a surprisingly low bid, one that it now has to back up with a good deal from the major US Internet providers.

“Level 3 has low-balled its way into a new business deal that will significantly increase the amount of Level 3's traffic Comcast would carry,” says the cable giant, “and suddenly wants to seriously disrupt settled economics of Internet traffic to meet its new business plan. Its position is not based on any principles of fair play on the Internet, but instead is merely the result of its rash bid to carry Netflix traffic at radically low rates, based on the flawed assumption that it could use its Tier 1 Internet backbone status to cram its CDN traffic onto others' networks on a settlement-free basis.”

Indeed, because Level 3 is such a major Internet backbone provider and has historically run only a smallish CDN operation, Comcast has actually been the one paying Level 3 for certain interconnections in the past.

But the Netflix deal alone is so massive that Level 3 has suddenly become a major CDN player. Comcast says that it was approached by Level 3 two weeks ago, just after Level 3 signed the Netflix deal, and was asked for 27 to 30 new interconnection ports using the two companies' existing interconnection agreement (that is, Level 3 would pay nothing more for adding up to 30 direct 10GigE connections to Comcast's network).

Comcast “was able to scramble and provide Level 3 with six ports (at no charge) that were, by chance, available and not budgeted and forecasted for Comcast's wholesale commercial customers.” After providing these six additional ports, Comcast concluded that the existing settlement-free peering agreement with Level 3 was still (barely) valid, but if Level 3 really wanted another 21 to 24 ports, this was simply too much traffic. Level 3 would have to pay for those ports like any commercial paid peering customer.

Comcast also notes that nothing about any of these new ports was contingent on the type of traffic coming across it. That is, the company was concerned only about traffic volumes, not content.

Comcast's peering and transit policies are available on the company's website, and those policies make clear that settlement-free peering is only available to a company that can “maintain a traffic scale between its network and Comcast that enables a general balance of inbound versus outbound traffic.”

163 Reader Comments

@Lonyo Either your formulation is really confusing (and you should rephrase it), or you got the whole issue backward:

Lonyo wrote:

Why should Comcast pay to get the data across Level3's network

Comcast is actually asking L3 to pay to get the data across Comcast's last mile.

Formulation confusing. Why should Comcast pay for servicing the data coming across Level3's network when Netflix is already paying Level3 for that privilege.Level3 is acting like a CDN, and expecting to be treated differently to normal CDNs because it's a backbone, just like Comcast says.

- NetFlix was going through Akamai to Comcast customers- Akamai was paying Comcast because it is a CDN- NetFlix is now going through Level 3- Level 3 is not paying Comcast because it is not a CDN

I don't think Comcast should get paid for delivering traffic requested by its end customers, whether it's a Wikipedia article or a competing video stream. This begs the question: What's special about a CDN? Why was Akamai paying Comcast anything?

It sounds like Akamai provided service for Netflix customers on Comcast by locating local server clusters within the Comcast network, so they paid Comcast to be their network service provider - that's what Akamai does: http://en.wikipedia.org/wiki/Akamai_Technologies

Level 3 is a tier 1 backbone provider, Comcast pays Level 3 for access to the internet. Comcast is perhaps a tier 2 network provider, so companies like Akamai can pay Comcast for access to the internet and access to Comcast's customers. ( Although, we like to think of this as: Comcast's customers pay Comcast for access to the internet. And when Akamai has access to the internet and Comcast's customers have access to the internet we meet in the middle and connect. ) Akamai is not a network transit provider at all, that is it has no pipes to transmit on but has to pay for access to them. That's what it means for Akamai to be a CDN and why they paid CDN access to Comcast.

I think the two Ars articles on this are good. I second the comment above that it would make an excellent Ars article to dive into the details of the costs.

Another part of the story that I would have liked Ars to cover in more detail is the difference in the relationships between Akamai/Comcast and Level 3/Comcast. The speculation in the above reddit link is that Comcast misses the Akamai revenue now that Akamai is no longer, or at least significantly reduced (http://www.fool.com/investing/general/2 ... level.aspx), in being a Netflix provider - and Netflix is 20% of all downstream internet traffic so it's a big chunk of traffic. (Incidentally, Youtube is the number two video service at 10%, and all other video and audio streaming services (Hulu, CNN, Fox, ABC, CBS, CW, Pandora, etc - and probably streaming Porn, too) combined amounting to another 10%. - http://www.sandvine.com/news/pr_detail.asp?ID=288 ). So now Comcast wants to charge Level 3 for the same revenue they used to get from Akamai. Which provides further support for the arguments made in yesterday's article that Comcast is leveraging its customers to charge rents, and would also be relevant to this article examining Comcast's motivations and the relevance of their peerage policies.

Maybe I don't understand what the issue is here. I have Comcast, I have a 50mbit connection to download, and have a 250gb cap monthly I must stay below. If I as a customer decide I want to stream from Netflix, or download some music, why can Comcast decide to charge extra to services that are popular. Netflix was popular before they moved to level 3, but now that it has been consolidated to a single company Comcast has a problem with this. Why? It's not like suddenly all their customers are going to be using 100x more bandwidth. It's going to be the same customers as before (plus some new ones of course), just from the same pipe.

Argue all you want for or against regulation of the internet, but it's these kinds of decisions that will eventually end up forcing regulation down their throats.

They used their backbone status to sell Netflix an impossibly low rate (compared to other CDN's) and expected Comcast to BUY more infrastructure from them to support their bad business decision.

Then they tossed out a press release with the words "net neutrality" completely out of context and got the internet's moron brigade to think Comcast is the bad guy in all this.

Unbelievable.

While I agree that it's silly for L3 to expect for Comcast to pay for all of the upgrades, you don't know that they did that. What they DID do, however, is say that they will not pay a CDN fee when they are not, in fact, a CDN. Level 3 is a Tier 1 network provider, Akamai is not a network provider at all. They don't have any pipes of their own to use, so they pay for Comcast to carry their data. This makes sense.

However, L3 and Comcast are both network providers. Users on one network are requeting data from another network. If I use Comcast and download a video, the people who serve that data have to pay for THEIR bandwidth. They shouldn't have to pay for mine. I've already done that. And if Comcast said I couldn't use YouTube until their network provider paid them money, I would stop paying Charter money-- because I paid them for access to the whole internet, not the parts that Charter decides is financially benefitial to them. If there is too much data, Comcast is responsible to ME for providing the upgrades. That is their job, to make the connections so I get my internet. If they can't do that, that is THEIR fault, not L3s.

L3 is NOT a CDN. They are a network provider. It is silly to ask them to act like a CDN (and to pay like one). Should they help pay for network upgrade costs for Comcast? Sure- it's mutually benefitial, and it is a rather sudden change for Comcast to deal with. Helping Comcast out will help out L3. They should NOT, however, be expected to pay monthly for the right to deliver content over Comcast's pipes, as the requests are coming from one network provider to another, and they BOTH have to use their own pipes to ensure contnt delivery.

Comcast is actually asking L3 to pay to get the data across Comcast's last mile.

If it is L3 that is paying to get the data across Comcast's last mile, then what are Comcast subscribers paying for?

Exactly.

There are non-trivial costs associated with adding 21-24 new connections, there is no doubt about that. The responsibility for the cost of adding them, however, falls on both parties. Comcast is being paid to provide data to their customers, L3 is being paid to send that data. If getting the data from L3 to Comcast requires more connections, both parties should be expected to pay up to improve the connections. Comcast is saying "you have to constatly pay us, or not only will we not improve connections, we will cut off the existing ones". This is why people are upset with Comcast.

Let's say Comcast and L3 are two countries that trade between each other. The United States of L3topia makes money by selling oil. One day they find a huge new oil field and want to sell more oil. The people in the Kingdom of Comcastia want this oil-- and the more there is, the more people will want to use it, which will mean more tax revenue for the Kingdom of Comcastia. Thus, it is financially benefitial to both countries to maximize the trade between them by increasing the amount of roadways between them. It is reasonable, therefore, that they split the cost of building bridges between them. However, the King of Comcastia is saying "you will pay us money every month, or we will allow no more oil shipments, even the ones we used to allow". Is this fair? No. The people of Comcastia want the oil, they pay for the Kingdom to open trading lanes with everyone. It is their right to have that oil. But the King of Comcastia is saying that the tax payers no longer have rights to the oil, even though the had it before.

Basically, Comcastia sucks as a nation, and you shouldn't live there if you have a choice.

Wow. Way to get it wrong.

The existing Peering arrangement between Comcast and L3 is that so long as the amount of data each entity is ending each other's way is equal, they don't need a Settlement nor any fees.

Now, however, L3 is picking up NetFlix as NetFlix's CDN, and they want to be able to send much, MUCH more data to Comcast that cannot fit within their current arrangement (as L3 only serves as a long-haul between Comcast endpoints for most of Comcast's traffic), which includes Comcast having to purchase new equipment that isn't in the budget, all while letting L3 do this for free - incurring costs to Comcast without compensation.

Well, that's not the way the business world works. In the old arrangement where things were equal, it wasn't an issue. But now L3 wants to keep that arrangement, but not make it equal anymore, and when Comcast said "Uh, no, and here's why..." they threw a hissy fit. I think another commentor hit the issue on the head when they said that L3 won by low-balling the offer, and they've never been a real CDN in the first place, and now they're scrambling.

They used their backbone status to sell Netflix an impossibly low rate (compared to other CDN's) and expected Comcast to BUY more infrastructure from them to support their bad business decision.

Then they tossed out a press release with the words "net neutrality" completely out of context and got the internet's moron brigade to think Comcast is the bad guy in all this.

Unbelievable.

While I agree that it's silly for L3 to expect for Comcast to pay for all of the upgrades, you don't know that they did that. What they DID do, however, is say that they will not pay a CDN fee when they are not, in fact, a CDN. Level 3 is a Tier 1 network provider, Akamai is not a network provider at all. They don't have any pipes of their own to use, so they pay for Comcast to carry their data. This makes sense.

However, L3 and Comcast are both network providers. Users on one network are requeting data from another network. If I use Comcast and download a video, the people who serve that data have to pay for THEIR bandwidth. They shouldn't have to pay for mine. I've already done that. And if Comcast said I couldn't use YouTube until their network provider paid them money, I would stop paying Charter money-- because I paid them for access to the whole internet, not the parts that Charter decides is financially benefitial to them. If there is too much data, Comcast is responsible to ME for providing the upgrades. That is their job, to make the connections so I get my internet. If they can't do that, that is THEIR fault, not L3s.

L3 is NOT a CDN. They are a network provider. It is silly to ask them to act like a CDN (and to pay like one). Should they help pay for network upgrade costs for Comcast? Sure- it's mutually benefitial, and it is a rather sudden change for Comcast to deal with. Helping Comcast out will help out L3. They should NOT, however, be expected to pay monthly for the right to deliver content over Comcast's pipes, as the requests are coming from one network provider to another, and they BOTH have to use their own pipes to ensure contnt delivery.

You're not getting the point - L3 wasn't a CDN - but by this very agreement with NetFlix, they are becoming a CDN.

As such, they should expect to have to pay the same fees as any other CDN.

Maybe I don't understand what the issue is here. I have Comcast, I have a 50mbit connection to download, and have a 250gb cap monthly I must stay below. If I as a customer decide I want to stream from Netflix, or download some music, why can Comcast decide to charge extra to services that are popular. Netflix was popular before they moved to level 3, but now that it has been consolidated to a single company Comcast has a problem with this. Why? It's not like suddenly all their customers are going to be using 100x more bandwidth. It's going to be the same customers as before (plus some new ones of course), just from the same pipe.

Argue all you want for or against regulation of the internet, but it's these kinds of decisions that will eventually end up forcing regulation down their throats.

This is what L3 wants from Comcast's customers - thinking that they're ability to reach content is in jeopardy.

Let me ask you a question - if you were a business owner, and you shared a building with a fellow business, and you had a gentleman's agreement that you would split the water bill (just for argument's sake) and that worked great for years. Then suddenly your neighbor starts using significantly more water, but only wants to pay what they've been paying in the past (in L3 and Comcast's case, this is zero), and not only that, but there are needed upgrades to the plumbing - but since the meter is on your side of the building, they expect you to foot the entire bill, would you go along with that?

The analogy isn't perfect, but that's essentially what L3 is asking of Comcast.

What I don't understand is this - Comcast isn't going to see a net traffic increase, right? Any bits that go to Comcast because of this deal would have gone there anyway.

Then what on earth is all the commotion about?

Not entirely true. Comcast owns quite a bit of back-haul fiber, not a Tier 1 amount, but pretty close. Additionally, all the additional traffic would be coming through their connection from L3; plus L3 want's additional connections which require additional equipment - but they expect Comcast to foot the entire bill for that equipment and upgrades.

Now, however, L3 is picking up NetFlix as NetFlix's CDN, and they want to be able to send much, MUCH more data to Comcast that cannot fit within their current arrangement (as L3 only serves as a long-haul between Comcast endpoints for most of Comcast's traffic), which includes Comcast having to purchase new equipment that isn't in the budget, all while letting L3 do this for free - incurring costs to Comcast without compensation.

Well, that's not the way the business world works. In the old arrangement where things were equal, it wasn't an issue. But now L3 wants to keep that arrangement, but not make it equal anymore, and when Comcast said "Uh, no, and here's why..." they threw a hissy fit. I think another commentor hit the issue on the head when they said that L3 won by low-balling the offer, and they've never been a real CDN in the first place, and now they're scrambling.

Yeah, opening with "wow, way to get it wrong" isn't exactly the begining of a rational discussion. We obviously disagree, but considering that a lot of what we disagree on is opinion, and not fact, neither one of us is really qualified to tell the other they are "wrong". That being said, I'm about 90% certain that you saying that L3 is acting as a CDN is factually inaccurate.

Now, as I undertand it, a CDN typically operates by placing nodes closest to the end-user and using the lines of their partner to transmit the data. Akamai and Limelight are CDNs because neither of them actually has any network infrastructure of their own. They pay to put the data on Comcast's lines from nodes close to the end-user because they don't have any lines of their own to use. CDNs are inherently in a position of servitude to network providers-- no single CDN has enough content that customers will absolutely demand access to it, so the power relationship is in the network providers courts, hence the fee.

Level 3 is not a CDN. They are a Tier 1 network provider. In fact, Comcast buys their connections from Level 3 (a 20-year deal was brokered in 2004). Level 3 is not placing their nodes close to the end-user, nor are they directly using Comcasts lines to transmit the data. The data is originates on L3 lines, unlike with Akamai and Limelight, both of which used Comcast lines as a starting point. Akamai HAD to pay Comcast to put their nodes close to the end-users and to pay for the connections, because they did are not a network provider. Again, since the traffic starts on L3 lines based on requests from Comcast subscribers, both parties are put under the same load. A CDN does not have lines of their own-- they are paying the network provider because of the load they are causing. However, in this case, the burden is equal, and originates from a Comcast user and is sent to L3.

While there is no longer parity between the two, the fact remains that L3 lines are the originating point of the data transmission, and that the only data which gets sent through Comcast lines is the data that Comcast customers have specifically reqested (AND PAID COMCAST TO RECIEVE).

Both companies are trying to double-dip here. L3 is trying to get money from Netflix to send data and also from Comcast to provide their Tier 1 connction. Comcast is trying to make L3 pay for sending data and also charge their customers to get that data. However, Comcast is saying that not only will they not upgrade their connections (which is certainly their right), they are also going to selectively filter out video content from L3. That is why this is a network neutrality issue. Because while Comcast and L3 may disagree on whose responsibility it is to pay for the increased connections neccessary, the fact is that as a Comcast CUSTOMER, your network provider is acting in a way that violates your contract with them. If I pay a company for access to the internet, and they decide that the network provider that google uses is sending them too much traffic, should they be allowed to block it? No! I paid them for access to all of the internet.

L3 isn't acting like a CDN, why should they be charged like one? I'm not saying the peering agreement as it stands is fair, but that's a different issue. Should the peering agreement be renegotiated? Yes. Should L3 be charged like a CDN when they aren't one? No. Should Comcast be allowed to effectively cut off their paying customers from content they desire without compensating the customers? No.

1. Was Comcast receiving fees from Akamai?2. If (1), were those fees for hosting Akamai instances on Comcast's network?3. If (2), Do other CDNs which "pay" Comcast have a similar set-up?4. Were there any CDNs who provided their delivery to Comcast through an intermediary?......i.e.: if FooCDN had hosting at L(3) facilities, did they also pay Comcast for delivery, even over L(3)'s pipes?5. If NOT (4), then how is the L(3) service different from 4?6. If NOT (5), then how soon can I get CLEAR?

L3 isn't acting like a CDN, why should they be charged like one? I'm not saying the peering agreement as it stands is fair, but that's a different issue. Should the peering agreement be renegotiated? Yes. Should L3 be charged like a CDN when they aren't one? No. Should Comcast be allowed to effectively cut off their paying customers from content they desire without compensating the customers? No.

So on a "being a douche" scoreboard, Comcast is beating L3 2 to 1.

Except that L3 is trying to act like a CDN in that they're going to be the provider for NetFlix - and it could very well be that they're planning on placing delivery nodes right before their peering points with other ISPs - without inside knowledge of their business plans, there's no way to know for sure.

But, it still stands that L3 wants to keep an arrangement like they're a Tier 1 provider, but pump the traffic of a CDN - which isn't fair.

The only group that has even mentioned filtering video traffic from L3 is L3 themselves; given it wouldn't be in Comcast's best interests to admit to something like that, however, it would be incredibly stupid of them to even mention it to anyone with the currently regulatory hammer hanging over their heads. Comcast is many things, but being stupid enough to say things that could jeopardize the company's goals isn't one of them.

You're not getting the point - L3 wasn't a CDN - but by this very agreement with NetFlix, they are becoming a CDN.

As such, they should expect to have to pay the same fees as any other CDN.

I think I am getting the point you're trying to make. I just simply disagree that what you say is true. L3 is acting NOTHING like a traditional CDN. They are not placing any nodes on Comcast lines. They are not using Comcast's lines as a starting point to transmit to 3rd party customers. This is what Akamai did. They placed regional nodes on Comcast lines, and served an area. If a Netflix request came in to Akamai servers from a non-Comcast customer close to the node, it still used Comcast's lines to pull that data.

L3 is only sending data through Comcast lines to Comcast customers, and they are not putting any nodes on Comcast lines. If they aren't acting like Akamai or any other traditional CDN, why do you expect them to pay like one?

They are providing content, yes...but they are also a network provider, unlike Akamai, who HAD to buy bandwidth from Comcast.

I'm not saying L3 is blameless, I'm simply saying that they aren't the ones threatening to start packet-filtering and affect the customers. L3 could also, theoretically filter out all packets from Comcast (since Comcast buys connectivity from them). But they aren't threatening that, now, are they?

L3 isn't acting like a CDN, why should they be charged like one? I'm not saying the peering agreement as it stands is fair, but that's a different issue. Should the peering agreement be renegotiated? Yes. Should L3 be charged like a CDN when they aren't one? No. Should Comcast be allowed to effectively cut off their paying customers from content they desire without compensating the customers? No.

So on a "being a douche" scoreboard, Comcast is beating L3 2 to 1.

Except that L3 is trying to act like a CDN in that they're going to be the provider for NetFlix - and it could very well be that they're planning on placing delivery nodes right before their peering points with other ISPs - without inside knowledge of their business plans, there's no way to know for sure.

But, it still stands that L3 wants to keep an arrangement like they're a Tier 1 provider, but pump the traffic of a CDN - which isn't fair.

The only group that has even mentioned filtering video traffic from L3 is L3 themselves; given it wouldn't be in Comcast's best interests to admit to something like that, however, it would be incredibly stupid of them to even mention it to anyone with the currently regulatory hammer hanging over their heads. Comcast is many things, but being stupid enough to say things that could jeopardize the company's goals isn't one of them.

Again, a CDN pays a network provider because they need to use the lines of that provider to TRANSMIT data, including to 3rd parties (non-Comcast customers who happen to live near the node on Comcasts lines. L3 isn't relying on Comcast to transmit that data, only recieve it.

THEY AREN'T ACTING LIKE A CDN. You can insist all you want that hosting content makes you a CDN, but if it acts like a dog, sounds like a dog,smells like a dog, and you call it a duck, I'm going to keep asking you to look, listen, and smell the damn thing or provide me with some other data, which you haven't done. Saying "L3 became a CDN" 100 times just means you're wrong 100 times (unless you can provide me some evidence that shows they are acting like a traditional CDN). Akamai paid Comcast to TRANSMIT their data, including to 3rd party network providers. L3 is asking Comcast to RECIEVE data, and only to their customers. So again, if they act nothing alike, and are not putting the same demands on Comcast...why should they be treated the sam

And nothing you have said has given any reason as to why Comcast should be allowed to effectively cut off their customers from part of the internet without providing them compensation. If 90% of my internet usage is Netflix, and Comcast blocks it, do I get 90% of my money back? No.

Comcast is wrong. So is L3 (for not giving any money). But Comcast is acting wrong towards L3 as well as their customers. That's why they are more wrong.

I think Wikipedia isn't always the best reference source, but here we go:

"A content delivery network or content distribution network (CDN) is a system of computers containing copies of data, placed at various points in a network so as to maximize bandwidth for access to the data from clients throughout the network. A client accesses a copy of the data near to the client, as opposed to all clients accessing the same central server, so as to avoid bottlenecks near that server."

Again, since L3 is hosting all of this stuff on their own network, they aren't placing it "near the client". I'm not even certain that L3 isn't using a centralized server-- are you? Can you provide evidence to that effect? As a Tier 1 provider, they don't have a need to distribute their servers in the same fashion as Akamai, and they certainly aren't placing nodes in close proximity to the people requesting the data. They are keeping it on THEIR network, not on Comcast's, so they are probably a good ways removed from most customers.

L3 isn't acting like a CDN, why should they be charged like one? I'm not saying the peering agreement as it stands is fair, but that's a different issue. Should the peering agreement be renegotiated? Yes. Should L3 be charged like a CDN when they aren't one? No. Should Comcast be allowed to effectively cut off their paying customers from content they desire without compensating the customers? No.

So on a "being a douche" scoreboard, Comcast is beating L3 2 to 1.

Except that L3 is trying to act like a CDN in that they're going to be the provider for NetFlix - and it could very well be that they're planning on placing delivery nodes right before their peering points with other ISPs - without inside knowledge of their business plans, there's no way to know for sure.

But, it still stands that L3 wants to keep an arrangement like they're a Tier 1 provider, but pump the traffic of a CDN - which isn't fair.

The only group that has even mentioned filtering video traffic from L3 is L3 themselves; given it wouldn't be in Comcast's best interests to admit to something like that, however, it would be incredibly stupid of them to even mention it to anyone with the currently regulatory hammer hanging over their heads. Comcast is many things, but being stupid enough to say things that could jeopardize the company's goals isn't one of them.

Again, a CDN pays a network provider because they need to use the lines of that provider to TRANSMIT data, including to 3rd parties (non-Comcast customers who happen to live near the node on Comcasts lines. L3 isn't relying on Comcast to transmit that data, only recieve it.

THEY AREN'T ACTING LIKE A CDN. You can insist all you want that hosting content makes you a CDN, but if it acts like a dog, sounds like a dog,smells like a dog, and you call it a duck, I'm going to keep pointing out all the facts.

Akamai paid Comcast to TRANSMIT their data, including to 3rd party network providers. L3 is asking Comcast to RECIEVE data, and only to their customers.

And nothing you have said has given any reason as to why Comcast should be allowed to effectively cut off their customers from part of the internet without providing them compensation. If 90% of my internet usage is Netflix, and Comcast blocks it, do I get 90% of my money back? No.

Comcast is wrong. So is L3 (for not giving any money). But Comcast is acting wrong towards L3 as well as their customers. That's why they are more wrong.

No such thing as "more wrong".

And I disagree. L3 would not have agreed to an equitable swap traffic agreement (that currently exists) with Comcast if all the traffic L3 was sending to Comcast was only destined for Comcast's customers - if that were the case, L3 would have Comcast by the short and curlies and would've been able to demand money. Whether they act like a traditional CDN or not is fairly irrelevant - they are asking for an arrangement outside of their existing agreement with Comcast, in that they're not going to have an equal swap of traffic.

Comcast scrapped together an additional 6 connections for them, but L3 wants more - an additional 21 to 24 connections, presumably so it can pump the necessary traffic; but they're not willing to assist in paying for the equipment necessary to turn up these connections, instead expecting Comcast to eat the entire cost, whether or not all the traffic is destined for Comcast's customers. Comcast is no longer a strict last-mile provider; they have a nation-wide backbone of their own.

Again, the only group that has even mentioned filtering video traffic from L3 is L3 themselves; given it wouldn't be in Comcast's best interests to admit to something like that, however, it would be incredibly stupid of them to even mention it to anyone with the currently regulatory hammer hanging over their heads. Comcast is many things, but being stupid enough to say things that could jeopardize the company's goals isn't one of them.

At worst, under the current arrangement, if the additional peering hardware wasn't added, Comcast customers wouldn't be cut off from L3 unless L3 did that themselves, but rather quality of service would have the potential to degrade for that streaming - which wouldn't be an issue if L3 ponied up some cash to help pay for the equipment for their customer (NetFlix) - something that should've been part of the contract they signed with NetFlix, but it's absence is probably how they under-bid everyone else.

L3 sounds desperate - they got in over their heads with their deal with NetFlix now they're trying to dig up the bandwidth to ensure they can meet the terms of their agreement.

L3 sounds desperate - they got in over their heads with their deal with NetFlix now they're trying to dig up the bandwidth to ensure they can meet the terms of their agreement.

Actually, very unlikely. And given Comcast's share of the US total bandwidth (compared with the 20% at peak time that Netflix uses), it is probably a relatively small proportion of L3 bandwidth provisioning. Again, note that L3 doesn't need any Comcast bandwidth to carry data to non-Comcast customers. So, really, only Comcast customers are impacted (all 16M of them, out of the 85M or so total).

I'm with Comcast. Can't believe it, but it's true. And this has all gotten stupid over vocabulary.

Level3 was effectively one of Comcast's ISPs before. There was undoubtedly some horse-trading going on, but in the end, Comcast trades this and that for access to Level3's backbone. That makes Comcast a subscriber.

Now Level3 wants it the other way around... it's Level3 that wants access to Comcast's network. Well, that makes them a subscriber to Comcast, and as we all know, Comcast subscribers pay fees.

Imagine if Comcast called you up at home and said "Hey, you like to download and you have lots of hard disks... mind if we put 30 more cable modems in your house and use them to their full capacity to save our own files?" I think I'd want a little something in return.

I know we all saw the article about peering agreements, and I know we all know what a CDN is. But if you simplify it, if you break it down to who stands to benefit from what, this is simply an upper-tier provider trying to backwash their services onto one of their customers' networks.

Look at it this way... Level3 could just as easily proceed as a CDN using the ports they already have with Comcast. And well, if those ports are enough for Comcast, but they aren't enough for Level3, that's Level3's problem.

I think Wikipedia isn't always the best reference source, but here we go:

"A content delivery network or content distribution network (CDN) is a system of computers containing copies of data, placed at various points in a network so as to maximize bandwidth for access to the data from clients throughout the network. A client accesses a copy of the data near to the client, as opposed to all clients accessing the same central server, so as to avoid bottlenecks near that server."

Again, since L3 is hosting all of this stuff on their own network, they aren't placing it "near the client". I'm not even certain that L3 isn't using a centralized server-- are you? Can you provide evidence to that effect? As a Tier 1 provider, they don't have a need to distribute their servers in the same fashion as Akamai, and they certainly aren't placing nodes in close proximity to the people requesting the data. They are keeping it on THEIR network, not on Comcast's, so they are probably a good ways removed from most customers.

"Comcast found itself in the middle of a renewed argument over its "evilness" yesterday afternoon as an interconnection dispute blew up into public view. Level 3 Communications, which runs a major Internet backbone along with a newer content delivery network (CDN), fired off a scathing press release accusing Comcast of (once again) threatening the "open Internet."

On November 11, Level 3 inked a deal with Netflix to serve as the streaming media company's new CDN starting January 1, 2011. In that capacity, Level 3 will cache and serve Netflix streaming video from sites across the country to avoid possible backbone congestion and to deploy streams from servers that are closer to end users.

Due to the size of the deal, Level 3 announced that it was doubling its own storage capacity and adding 2.9 terabits per second (Tbps) of CDN capacity, alongside the 1.65Tbps that it rolled out late this year. The entire Netflix streaming library, which consists of more than 20,000 titles, will be moved directly to Level 3 servers during November and December in preparation for the January rollout. "

Q: If customers pay you to provide them fast access to the internet (including highly desirable content from companies like Netflix), and a company approaches you that would like to provide high-speed access to popular content (like Netflix), why would you [I[not[/I] bend over backwards in order to help them do so?

A: You are currently leveraging a monopoly position to extract rent from companies like Akamai and Limelight to send data to your own customers, and you're pissed that a serious backbone has entered the game and foiled some of your rent-seeking behavior.

And I disagree. L3 would not have agreed to an equitable swap traffic agreement (that currently exists) with Comcast if all the traffic L3 was sending to Comcast was only destined for Comcast's customers - if that were the case, L3 would have Comcast by the short and curlies and would've been able to demand money. Whether they act like a traditional CDN or not is fairly irrelevant - they are asking for an arrangement outside of their existing agreement with Comcast, in that they're not going to have an equal swap of traffic.

Comcast scrapped together an additional 6 connections for them, but L3 wants more - an additional 21 to 24 connections, presumably so it can pump the necessary traffic; but they're not willing to assist in paying for the equipment necessary to turn up these connections, instead expecting Comcast to eat the entire cost, whether or not all the traffic is destined for Comcast's customers. Comcast is no longer a strict last-mile provider; they have a nation-wide backbone of their own.

Again, the only group that has even mentioned filtering video traffic from L3 is L3 themselves; given it wouldn't be in Comcast's best interests to admit to something like that, however, it would be incredibly stupid of them to even mention it to anyone with the currently regulatory hammer hanging over their heads. Comcast is many things, but being stupid enough to say things that could jeopardize the company's goals isn't one of them.

At worst, under the current arrangement, if the additional peering hardware wasn't added, Comcast customers wouldn't be cut off from L3 unless L3 did that themselves, but rather quality of service would have the potential to degrade for that streaming - which wouldn't be an issue if L3 ponied up some cash to help pay for the equipment for their customer (NetFlix) - something that should've been part of the contract they signed with NetFlix, but it's absence is probably how they under-bid everyone else.

L3 sounds desperate - they got in over their heads with their deal with NetFlix now they're trying to dig up the bandwidth to ensure they can meet the terms of their agreement.

There's no such thing as "more wrong"? So I jaywalk and you kill someone would you say we're the same amount of wrong? Of course there are differing levels of wrong. If you're not a fan of semantics, I could simply say that Comcast is doing more wrong things than Comcast, and it is affecting more people, but I simply figured that was a lot more to type. Speaking of wrong...

You're right in saying that they are asking for a different arrangement than they previously had with Comcast. That doesn't make them a CDN. You're saying they are one, but STILL fail to provide any evidence to support this claim. If I set up a server in my home to stream movies to other people, I am not a CDN simply because I am "delivering content". I think that's where your confusion comes in. Delivering content doesn't make you a CDN just because the C and D stand for Content Delivery.

Comcast does not have "a nation-wide backbone of their own". They buy Tier 1 backbone infrstructure FROM L3, and they will continue to do so for the next 14 years, at least.

Again, Comcast should expect L3 to pay money to set up the 21-24 new connections. No doubt. It should be at least half of the total cost, if not all of it. I have no problem with that. However, since L3 isn't, by definition, a CDN, they shouldn't pay like one. I also have no problem with Comcast not upgrading their connections until L3 pays for them. What I have a problem with is a network provider FILTERING PACKETS based on their origin. If Comcast simply said "pay, or we won't add those connections, fine. It is the fact that they are blockig traffic for their customers that bothers me. If it bottlenecks, it bottlenecks...but BLOCKING is an act against L3 and their customers, who pay them to access the internet.

Again, this IS a net neutrality debate simply because of Comcasts' threats.

Level3 was effectively one of Comcast's ISPs before. There was undoubtedly some horse-trading going on, but in the end, Comcast trades this and that for access to Level3's backbone. That makes Comcast a subscriber.

Now Level3 wants it the other way around... it's Level3 that wants access to Comcast's network. Well, that makes them a subscriber to Comcast, and as we all know, Comcast subscribers pay fees.

No. Simply, no. The situation on that has not changed. It is still Comcast that wants access to L3's network, to get access to the data Comcast's customers want. As such, L3 is still a provider for Comcast.

deet wrote:

Imagine if Comcast called you up at home and said "Hey, you like to download and you have lots of hard disks... mind if we put 30 more cable modems in your house and use them to their full capacity to save our own files?" I think I'd want a little something in return.

Which is what Akamai is doing, by putting storage on Comcast's nodes. Which is not what L3 is doing, since its storage is connected to its own nodes.

deet wrote:

Look at it this way... Level3 could just as easily proceed as a CDN using the ports they already have with Comcast. And well, if those ports are enough for Comcast, but they aren't enough for Level3, that's Level3's problem.

Which amounts to L3 throttling Comcast's access to the data it's customers want. I am sure Comcast customers would not be happy with it (L3, on the other hand, really couldn't care less: not their fault if Comcast has not provisioned enough ports on their side)

The issue is obviously not about the 24 10GbE ports, that's small potatoes to someone with 18M subscribers (heck it's not even big potatoes to someone like me with with only 1,000 users), it's about the shift of an additional 240Gbps onto Comcast's backbone from the local offices where Akamai has servers today. This is fairly disruptive to Comcast because they designed their network around assuming they could double dip and both put off backbone upgrades AND charge Akamai for access (as an aside back when Akamai started they generally got to place their servers for free exactly because it pushed so much high bandwidth usage off of ISP's backbone or uplink connections). In this way it really IS a fight about network neutrality because it's Comcast saying they want to charge both their customers and whoever is providing content (either a CDN or a peer hosting a large amount of traffic) rather than just taking the money that their customers are paying for bandwidth and building a network that can accommodate that traffic.

And I disagree. L3 would not have agreed to an equitable swap traffic agreement (that currently exists) with Comcast if all the traffic L3 was sending to Comcast was only destined for Comcast's customers - if that were the case, L3 would have Comcast by the short and curlies and would've been able to demand money. Whether they act like a traditional CDN or not is fairly irrelevant - they are asking for an arrangement outside of their existing agreement with Comcast, in that they're not going to have an equal swap of traffic.

Comcast scrapped together an additional 6 connections for them, but L3 wants more - an additional 21 to 24 connections, presumably so it can pump the necessary traffic; but they're not willing to assist in paying for the equipment necessary to turn up these connections, instead expecting Comcast to eat the entire cost, whether or not all the traffic is destined for Comcast's customers. Comcast is no longer a strict last-mile provider; they have a nation-wide backbone of their own.

Again, the only group that has even mentioned filtering video traffic from L3 is L3 themselves; given it wouldn't be in Comcast's best interests to admit to something like that, however, it would be incredibly stupid of them to even mention it to anyone with the currently regulatory hammer hanging over their heads. Comcast is many things, but being stupid enough to say things that could jeopardize the company's goals isn't one of them.

At worst, under the current arrangement, if the additional peering hardware wasn't added, Comcast customers wouldn't be cut off from L3 unless L3 did that themselves, but rather quality of service would have the potential to degrade for that streaming - which wouldn't be an issue if L3 ponied up some cash to help pay for the equipment for their customer (NetFlix) - something that should've been part of the contract they signed with NetFlix, but it's absence is probably how they under-bid everyone else.

L3 sounds desperate - they got in over their heads with their deal with NetFlix now they're trying to dig up the bandwidth to ensure they can meet the terms of their agreement.

There's no such thing as "more wrong"? So I jaywalk and you kill someone would you say we're the same amount of wrong? Of course there are differing levels of wrong. If you're not a fan of semantics, I could simply say that Comcast is doing more wrong things than Comcast, and it is affecting more people, but I simply figured that was a lot more to type. Speaking of wrong...

Not in the business world, no.

Operative Alex wrote:

You're right in saying that they are asking for a different arrangement than they previously had with Comcast. That doesn't make them a CDN. You're saying they are one, but STILL fail to provide any evidence to support this claim. If I set up a server in my home to stream movies to other people, I am not a CDN simply because I am "delivering content". I think that's where your confusion comes in. Delivering content doesn't make you a CDN just because the C and D stand for Content Delivery.

Comcast does not have "a nation-wide backbone of their own". They buy Tier 1 backbone infrstructure FROM L3, and they will continue to do so for the next 14 years, at least.

Oh yes, yes they do. It's how their Data Center in Denver can pump VOD content to their local Headends across the country without letting anyone else interfere with it. They just completed, in many locations, a change that combined their service delivery (ie. what customers connect to) network and their internal networks to prevent outside access to that data. It's also why subscriber-to-subscriber transfer rates (and phone calls) are the fastest and clearest among providers, because the data never leaves Comcast's network. Comcast has been buying up dark fiber for the past 5 years, at least, and building their own backbone. They use providers like L3 to transfer that data when the end point is not on their internal network.

Operative Alex wrote:

Again, Comcast should expect L3 to pay money to set up the 21-24 new connections. No doubt. It should be at least half of the total cost, if not all of it. I have no problem with that. However, since L3 isn't, by definition, a CDN, they shouldn't pay like one. I also have no problem with Comcast not upgrading their connections until L3 pays for them. What I have a problem with is a network provider FILTERING PACKETS based on their origin. If Comcast simply said "pay, or we won't add those connections, fine. It is the fact that they are blockig traffic for their customers that bothers me. If it bottlenecks, it bottlenecks...but BLOCKING is an act against L3 and their customers, who pay them to access the internet.

Again, this IS a net neutrality debate simply because of Comcasts' threats.

What threats? L3 is the only one claiming that Comcast made a threat - but that doesn't wash, considering that Comcast has the equivalent of a regulatory ban-hammer over their heads.

I wouldn't say the L3 is a subscriber to Comcast. I say they're brilliant for this idea. They realized that normally, a CDN must PAY for the privilege of putting servers all around nodes to provide lots of bandwidth for their customers, youtube, netflix, etc. L3 realized they had pipes fast enough to deliver the same bandwidth without the servers on the nodes. No servers, lower cost. Additionally, being "Comcast's ISP" they knew that once all that bandwidth that comcast had been able to supply from within their network(and being payed to do so) had to come from the Internet at large, Comcast would have to buy more capacity from their ISP, L3. So L3 is double dipping, which is why they could lowball any CDN bid. Comcast is reasonable to be upset when they are hit with the simultaneous loss of revenue and a large bill to provide the same level of service to the customer. I suppose that Comcast could simply not add any more capacity, let their customers get pissed at slow video downloads, and watch L3 break their conract to deliver Netflix videos at a reasonable speed, then hope the other guy blinks before customers start leaving. They're both trying to bend each other over a barrel, and as usual, it's the customer that's getting the shaft.

Again, according to the definition of CDN, they really aren't. CDNs operate in close proximity to the final consumer (the people watching Netflix). If L3 is serving content to Nebraska from another state, they aren't close to the consumer, which is pretty much the point of a CDN- having many nodes close to the customer to reduce bottlenecks. Again, CDNs pay network providers for the ability to TRANSMIT data locally. If L3 is adding 2.9 Tbps of bandwidth to THEIR OWN LINES, they are not a CDN.

Besides the even larger point is that even if they are a CDN, they wouldn't be a CDN customer for Charter. Let's say that L3 has 20 nodes around the country. All of them are on L3 lines. The person they would pay CDN fees to is L3, not Comcast. To pay CDN fees to Comcast, the nodes would have to be on Comcast's lines. Because CDNs TRANSMIT data to customers from the network providers. L3 isn't doing that.

You really, really don't have a leg to stand on. L3 is not a CDN by the same standard as Akadai. Even if they are a CDN, they are running the nodes on their own lines, so they aren't using Comcast's lines to transmit, which means they would pay themselves.

Think of it this way: L3 sells bandwidth to Comcast. Comcast sells bandwidth to a Tier 3 provider called Company X. A guy using Company X internet pays for netflix. Right now, that Netflix movie would be served from an Akadai node on the Comcast pipes. Hence, Comcast gets paid. Now, that data is sent from a node on the L3 server to the 3rd party provider with nothing being transmitted from Comcast pipes. Why should Comcast get paid the same fees when they aren't doing the same job?

How can you expect to have balanced traffic ratios, when Comcast is primarily an eyes network? Typical web browsing is probably in the area of 5:1 downbound, and possibly as high as 10:1. This seems a specious position at best.

Attention Comcast customers:

In the interest of generating more settlement-free peering arrangements with more networks, I humbly suggest you all download a Linux ISO via BT and never stop seeding it. This will generate the upstream traffic necessary to "balance" existing paid settlement peering.

Another thing, everyone keeps saying "Level3 is not a CDN". Where does this BS come from? They are and have been for some time. Hell, the first article already stated that they were doing 1.mumble terabits of CDN traffic...

Also everyone is looking at CDNs as some kind of evil leeches who are the only beneficiaries of locating servers within or near eyeball networks. Please remember that in the early days Akamai most certainly did not PAY to locate servers at eyeball ISPs. Why is that? Because it is BENEFICIAL TO THE EYEBALL NETWORK to have the content be delivered once from outside their network to the CDN servers rather than have to PAY transit costs to bring that same content in over and over again. How the CDNs got snookered into paying, I don't know. Maybe it's not a large amount, maybe it's enough to cover rental of cabinets and power costs - that would seem fair.

I'm also thinking Comcast is being a bit loose with their terms here - the suggestion is that L3 is just going to start blasting 21-24 10GbE ports at 100% 24/7. I suspect those ports will be quite underutilized for some time in many of the smaller markets. Let's also not forget that Comcast is already carrying all this traffic - it's not like Netflix does not exist now and they're just turning on the switch when L3 starts serving the content.

While it would be nice and gentlemanly if L3 maybe threw Comcast a bone by buying some equipment, it's not like Comcast is some little regional operation that can't absorb a cost that is peanuts compared to the rest of their business of providing connectivity and support to all their customers.

It's partly Comcast looking at how it was getting money from Akami as a CDN, a server, and planned for that model. Now that relationship is changing.

Level 3 probably figured they could use the fact that Comcast gets far more data from Level 3 then they get from Comcast, and could use that "peering" imbalance to their advantage to cover netflix traffic. Comcast views it as lost revenue and a dramatic shift in what was probably a very pro-comcast peering agreement.

Both are in the right depending on how you view the peering relationship vs CDN agreements. Comcast probably just crapped itself wondering how they lost out on both ends of the Level3/Netflix agreement.

What's the deal with this article, you feel like you already told the other side of the story so you need to tell Comcast's side, only, to balance it out? Why not factor the new news (Comcast's response) together with what you already know and continue telling the complete story.

There was a point in the earlier story which is utterly missing here, but which remains valid, namely that this isn't about peering for transit traffic, it's about traffic intended for Comcast's last-mile network. Given how Comcast's ISP customers use that network, of course there's more inbound than outbound. That's clearly going to be true for the Internet as a whole, and also for an average peer, in this case Layer3, and also for wherever Netflix traffic is coming from, whether that's Layer3 or not. And, Comcast's ISP customers are paying for that traffic already.

So this basically boils down to Comcast saying (to Layer3, but by extension, to anyone with content their customers want): pay us to reach our customers. When you put it like that, it's a lot harder to defend.

And yeah, lots of other commenters are saying the same thing. I'm just curious why this point dropped out of the Ars story.

Here's how it works, and I am pretty certain of my information as I have several friends the work for Level 3 out of the Tulsa office and I was with the company back when it was William's, and before L3 bought them for their backends.

L3 and Comcast had a peering agreement. Here is the way it works, they make a deal that says "If we need to send data from us to someone else and it has to cross your network to get there (it may be going from Comcast to Cox, or from Cox to SWBell through Comcast and L3's networks, origination point doesn't matter just their two connections) so long as the data amount is equal we won't charge each other and for each amount it is unequal there will be a cost on the originating side of X amount.

L3 doesn't just send Netflix content over Comcasts lines, they may need to send it through Comcast to get to subscribers on say Cox or Verizon FIOS because that is the most expedient way, so yes Comcast has a point, even the people I know that work at L3 say they fully understand Comcast's arguements and that is the way it has always been done (these are the SAs and Engineers that eal with it day in and day out). L3 is just upset that now instead of raking in the dough for being the primary backend and not the originator (most of the time) now they are going to have to payout quite a bit for it.

BTW L3 has also been a CDN for quite some time, who do you think handles the retransmission of the Superbowl for cable companies (at least in the mid to southwest US)? Level 3, as well as ESPN and several other major content providers (you used to actually be able to go to the Oklahoma Technology Center in downtown Tulsa a couple of year back and see on TVs everywhere what they were currently transmitting out to the cable providers)... I actually know several people who got fired from there as well a few years back because they lost the primary transmission lines out of the William's Center a few years back for 3 seconds (during the ssuperbowl) and for whatever reason it didn't fail over to the secondary node. So no they are not just "becoming" a CDN, they have been one in many ways (primarily on the cable side). This just happens to get the most notice because it isn't something providers can overlook as it is not something they profit off of such as the Superbowl is.

Also everyone is looking at CDNs as some kind of evil leeches who are the only beneficiaries of locating servers within or near eyeball networks. Please remember that in the early days Akamai most certainly did not PAY to locate servers at eyeball ISPs. Why is that? Because it is BENEFICIAL TO THE EYEBALL NETWORK to have the content be delivered once from outside their network to the CDN servers rather than have to PAY transit costs to bring that same content in over and over again. How the CDNs got snookered into paying, I don't know. Maybe it's not a large amount, maybe it's enough to cover rental of cabinets and power costs - that would seem fair.

Exactly, I remember when Akamai first started up, the owner of my ISP was thrilled to get a local node for each of his main POP's because it meant that the traffic reduction on his outbound DS3's could push off an upgrade to bigger lines for an extra 6-12 months. The CDN's got bullied into paying because of the monopoly/duopoly nature of the US last mile providers.

They informed Level3 that if they were going to be so far out of balance with respect to their peering arrangement that they could have 20 more at the standard rate they were charging other CDNs: $50k per port to start, and $25k monthly recurring per port (10 gig ain't cheap).

They also told Level3 "look, we can get you these 20 but you need to sign on the dotted line if you want this bandwidth because we have other customers looking to buy these; hell, we'll even get you what you need next calendar year if you want, but we can't hold up other folks while you 'think about it.'"

Right, because pulling a dick move that affects a business partner, and pulling a dick move that affects business partners and robs your customers of functionality of the service they pay you for without returning any of said money are exactly the same thing. I'm just saying doing 2 different wrong things isn't the same as doing 1 wrong thing...and the "business world" operates in the same realm of mathematics as the rest of the world. 2>1, no matter what "world' you're ing.

Oddly enough, none of those paragraphs indicate where/how the servers are located, which is kinda important in determining if it's a CDN. And none of those servers are on Comcast's pipes, so even if we loosen the definition of CDN to include a Tier 1 provider...they still wouldn't be a CDN customer of Comcast. They'd be a CDN customer of L3. So they'd be paying themselves...so sure, I agree that L3 should be paying CDN fees...as long as we're saying that they pay it to themselves.

Digital Noise wrote:

Oh yes, yes they do. It's how their Data Center in Denver can pump VOD content to their local Headends across the country without letting anyone else interfere with it. They just completed, in many locations, a change that combined their service delivery (ie. what customers connect to) network and their internal networks to prevent outside access to that data. It's also why subscriber-to-subscriber transfer rates (and phone calls) are the fastest and clearest among providers, because the data never leaves Comcast's network. Comcast has been buying up dark fiber for the past 5 years, at least, and building their own backbone. They use providers like L3 to transfer that data when the end point is not on their internal network.

Well, I know that most of national high-bandwidth stuff like VOIP services (amongst many others) are purchased from L3. I'm reasonalby certain the VOD stuff is as well, but I'd have to do some more research...and considering it's your claim that they are, I'll let you handle researching your own claims. I'm not saying you're wrong, but claiming that the data center in Denver doesn't make a pass-off to any other network at any point in the country seems a bit off, and I'd like to see some citation.

Digital Noise wrote:

What threats? L3 is the only one claiming that Comcast made a threat - but that doesn't wash, considering that Comcast has the equivalent of a regulatory ban-hammer over their heads.

From the very same article you've quoted twice now (and it's even under the "What We Know" section :"A week after Level 3 announced the Netflix deal, Comcast told the company that it would “demand a recurring fee from Level 3 to transmit Internet online movies and other content to Comcast customers who request such content,” in the words of yesterday's Level 3 press release."

That, to me, is a threat. Comcast hasn't denied the accusations, simply saying that they argument is about the peering relationship. The two facts aren't mutually exclusive, and if Comcast's leter hadn't included any comments regarding the "toll-booth", they would have said so. The "regulatory ban-hammer" you mention is exactly why they WOULD refute the accusations if they weren't true. They haven't denied threatening L3. That speaks volumes.

They informed Level3 that if they were going to be so far out of balance with respect to their peering arrangement that they could have 20 more at the standard rate they were charging other CDNs: $50k per port to start, and $25k monthly recurring per port (10 gig ain't cheap).

They also told Level3 "look, we can get you these 20 but you need to sign on the dotted line if you want this bandwidth because we have other customers looking to buy these; hell, we'll even get you what you need next calendar year if you want, but we can't hold up other folks while you 'think about it.'"

Voila, Level3 gets all upset about crap.

You forgot something: Comcast threatening to block traffic from L3 by packet filtering.

That's why I'm upset about crap. I could give less of a crap about who wins in a L3 versus Comcast debate. What I do care about in Network Neutrality. Comcast just said "if it's worth money to us, we'll filter IPs".

Had they simply said "no" to the request for more connections, I'm fine with it. One huge company fighting with another huge company. I really don't feel the need to fight for either side. Now, if one company threatens to mess with the customers ability to access conent because it's financially benefitial for them to do so, and they don't offer to reimburse said customers? Yeah, you bet your ass I have a problem with that.

2) Who requests, who delivers is a moot point. This has NEVER been a factor in the cost of networks. An imbalance of trade is an imbalance of trade no mater how the transaction is initiated. Level3 cannot say one thing in the past and say the opposite now. In the past Level 3 has correctly won this argument, but now takes the side of who they have argued against.http://www.prnewswire.com/news-releases ... 37437.html

This really is a 180 degree change in position for Level 3 now that they want to enter the CDN business. Their positions of the past where the sender should pay their portion of network costs (a logical and common belief by most) has now changed to where they believe you and I as consumers should half to pay for 100% through our ISP.

Questions for Level3

- Will you give settlement free peering with all CDNs like you expect of your CDN? - your competitors- Should all CDNs get settlement free peering like you or should only Level3 have this advantage?- Should only consumers pay for end to end network traffic as your position shifts all costs to eyeball networks?- Will you give settlement free peering with all eyeball networks

Been a Comcast subscriber and having no other option to switch because of the Monopoly they have in my area I know for a fact that they are throttling m internet. I can only watch a single hour of video either netflix, hulu or whatever At 61 minutes the connections dramatically slow downs for the video site I am using but other sites loads as normal. I can't wait for Fios, U-Verse or any other to replace this crap.

- Will you give settlement free peering with all CDNs like you expect of your CDN? - your competitors- Should all CDNs get settlement free peering like you or should only Level3 have this advantage?- Should only consumers pay for end to end network traffic as your position shifts all costs to eyeball networks?- Will you give settlement free peering with all eyeball networks

- Why all of a sudden the change in policy???!??!??!??

I doubt L3 has to worry about peering with most CDNs, simply because most operate more like Akadai (purchasing from companies like Comcast, rather than a Tier 1 provider like L3). There doesn't seem to be much chance at a CDN operating in close proximity to a neighborhood and still reaching back to the Tier 1 provider. What L3 is doing is unique because of their position as a Tier 1 provider. Not many people can match that.

Again, a lot of the "settlement" has to do with where the nodes are placed. If I'm a guy with a bunch of servers but no pipes, I have to buy access to the pipes. If I'm a guy with the biggest pipes, things are different. L3 isn't putting any nodes on anybody else's lines, as far as I know. They're laying their own lines, apparently. So if they're building their own network infrastructure in order to serve content, should they also be expected to fund the growth of other network providers? If so, then L3 has no incentive to offer build their own infrastructure and reduce cost (which reduces cost to customers...). Saying that L3 has to pay CDN fees on top of all the infrastructure work they did expanding their own network could directly affect customers. If L3 can't afford to serve Netflix while paying CDN fees to anyone they transmit data to, then Netflix has to go back to higher-cost companies...and they may not be able to afford the same great streaming-only option at that price point.

I do agree there should be a peering fee, especially if they are using Comcast pipes to transmit to other providers (I had thought I read that this wasn't the case, but some people are saying they are). Peering agreements ARE based on mutual bandwidth, so a fee based on actual difference in data transmission is okay. A flat CDN fee just doesn't seem right to me.

And I just can't help saying it-- the fact that Comcast used paying customers as leverage in all of this should piss people off. If they determine that too much bandwidth is coming from game consoles, should they be allowed to block all gaming packets? If they determine that YouTube traffic is too high, should they be allowed to block that until they get paid. People PAY THEM to get internet. If Comcast is trying to determine which parts of it you get, and isn't reimbursing you for all the parts of the internet you can't use, that's an untennable position in my opinon.

So should Comcast actually charge the cable networks to give their subscribers access to their channels? They dump content onto Comcast's TV network, so they should pay for Comcast to deliver it. Data is data and infrastructure is infrastructure, whether it used for the general Internet or a specialized service.

If Comcast decides that those TV networks benefit more from the additional viewers and advertising revenue than Comcast does from the additional subscribers attracted by those channels, they might be in a position to charge media outlets for delivery as well. It worked for Level 3.

This was never about the direction of data flow, or traditional rules of who pays who. It is about the leverage one party gained over the other. Since Level 3 became contractually obligated to Netflix to ensure speedy delivery of their streams to their subscribers, regardless of ISP, Comcast gained the leverage to charge them for that delivery.

I doubt Comcast would have had similar leverage if it was some other backbone provider Netflix decided to use, even if all the traffic was still routed through Level 3.